These stocks are starting to gain traction in this economic environment and should finish the year strong

The railroad company operates an expansive 20,000-mile network of railways throughout the eastern half of the United States, and serves over 1,200 facilities — including every major port on the East Coast and numerous Gulf Coast and river ports. Norfolk owns or leases more than 4,000 locomotives and more than 87,000 freight cars.

Railroads are a high-barrier-to-entry business. Norfolk Southern’s railway network is built along rights-of-way acquired over more than a century. Today, it would be nearly impossible to assemble the land rights necessary to build a competing rail system.

To increase the income from those shipments, Norfolk has done more with less. For every hour worked by an employee in 2010, Norfolk Southern moved a ton of goods 3,218 miles — an 11% improvement over 2009. The efficiency gains fostered a 36.4% increase in income from railway operations.

Norfolk Southern has paid a dividend every year since 1901. Today’s $1.60 in annual dividend payments offers investors a 2.23% yield. Over the past five years, Norfolk has outperformed the S&P 500 by more than 30 percentage points, with a compound annual growth rate of 9.6%.

The efficiency of railroad fuel consumption is a draw for customers. In a study from November 2009, the Federal Railroad Administration found that rails were much more fuel-efficient than trucks, beating them in all 23 types of movement compared. Rail transport was found to be up to 5.5 times more efficient at certain tasks than trucking, and at minimum was 1.9 times as efficient.

With sustained high fuel prices, shippers are looking for the most efficient form of transportation. On land, that is railroads.

My other railroad recommendation for you is Canadian National Railway (NYSE:CNI). CNI is the premier Canadian railroad company and operates a coast-to-coast network of rail lines in Canada that extends down through the heart of the United States to the Gulf Coast.

Canadian National has fully embraced its position as a fuel-efficient alternative to trucking by making reductions in fuel consumption a key part of its business strategy. By upgrading locomotives and adding sophisticated telemetry systems, cruise control optimizers and other advancements, CN is actively upgrading the fuel efficiency of its locomotive fleet to save money and attract customers.

Next Up: Consumers

The next group of stocks on my list is a collection of consumer staples, including McDonald’s (NYSE:MCD), Colgate (NYSE:CL), Hormel Foods (NYSE:HRL), McCormick & Co. (NYSE:MKC), Kraft (NYSE:KFT), and Hershey (NYSE:HSY).

Since June 2010, real average hourly earnings in the United States have fallen by 2.2%. While the price of gasoline has declined recently, it still is up 29.6% since last June.

That’s a double whammy on Americans’ disposable incomes. That’s less money for the monthly Harley payment or a vacation trip to Key West. But Americans still need to eat, brush their teeth and clean their homes.

McDonald’s is America’s go-to, on-the-run, cheap food source. Premium products like the Angus Third Pounder and the McCafé line have brought new well-heeled customers to McDonald’s, but this summer, Americans looking to save money on the road will be pulling up to the new double drive-through windows at many McDonald’s and ordering from the dollar menu.

Colgate recently completed a European expansion with the conclusion of its purchase of Sanex. The brands owned by Sanex have strong market-share positions around Europe and add heft to Colgate’s European operations.

The other four in this group sell food — an essential purchase, strong economy or not. Americans have come to rely on the brands sold by Hormel, McCormick, Kraft and Hershey. Each of these companies’ stocks has outperformed the S&P 500 during the past five turbulent years.

Much of the recent pricing pressure at food companies has started to recede with the end of the Federal Reserve’s QE2 program. The end of the monetary stimulus has triggered a rationalization of agricultural commodity prices and decreased the pressure on food industry margins.